Abiomed Plunges After Disclosing Investigation
NEW YORK (AP) -- Shares of Abiomed Inc. tumbled to annual lows Thursday after the heart device maker said U.S. attorneys are investigating the marketing and labeling of its Impella 2.5 system.
Abiomed said it was informed of an investigation by the U.S. Attorney's Office for the District of Columbia on Friday. The company received a subpoena related to the investigation on Wednesday.
Impella systems are used during and after surgery to relieve heart failure. They allow surgeons to implant a device that keeps a patient's blood flowing. Impella products bring in almost all of Abiomed's revenue: the company reported $37.4 million in revenue in the fiscal second quarter, and $32.8 million of that total came from Impella. Almost all Impella sales are made in the U.S.
The Danvers, Mass., company said it is responding to the subpoena and intends to cooperate fully.
Shares of Abiomed sank $6.11, or 30.8 percent, to $13.71 in midday trading. Earlier the stock reached a 52-week low of $13.27.
Abiomed reported its fiscal second-quarter results Thursday, and said its net income grew to $5.5 million, or 13 cents per share, from $601,000, or 2 cents per share. Revenue increased 27 percent in the quarter ended Sept. 30, with Impella revenue rising 32 percent.
Analysts were expecting the company to report net income of 5 cents per share and $37.3 million in revenue, according to FactSet.
The company said 30 U.S. hospitals bought Impella 2.5 systems during the quarter, bringing its total to 695 facilities. U.S. revenue from the product grew 33 percent to $30.8 million.
Abiomed said it continues to expect $155 million to $157 million in revenue in its current fiscal year. Analysts are forecasting $158.2 million, on average.